Small cars drive up auto sales

High demand drives pickup truck market, too, in summer surge

Associated Press

Associated Press

Published 6:01 pm, Thursday, August 1, 2013

In this Thursday, Aug. 5, 2010, photo a 2011 Toyota Camry LE sits on the lot at Kendall Toyota in Miami. General Motors, Ford, Chrysler, Toyota and Nissan all reported double-digit sales gains in July 2013, clear signs that U.S. auto sales will remain strong into the second half of the year. (AP Photo/Lynne Sladky) ORG XMIT: NYBZ152

Pickup trucks may have led the charge, but strong sales of small cars in July showed demand for new vehicles is broad — and not slowing down.

Car sales grew in the first six months of this year, but not at the blistering pace of trucks and SUVs. Through June, full-size pickups were up 22.5 percent over the year before, while cars were up just 5 percent.

Last month, car sales took off. General Motors' car sales jumped 24 percent. Sales of the Honda Civic small car were up 30 percent to 32,416, their best July in 13 years. Sales of the recently redesigned Ford Fiesta subcompact jumped 89 percent, while the Toyota Prius hybrid was up 40 percent.

Part of the small car surge was seasonal. Small cars always sell better in the summer and then taper off as winter approaches. But it's also an indication of the high level of demand from regular consumers, not just the contractors and other small businesses that helped fuel the truck boom.

Christian Mayes, an auto analyst with Edward Jones in St. Louis, said truck sales will pick up even more in the fall. But he also expects car sales to remain strong through the rest of this year because short-term interest rates should stay low, keeping payments down. Also, automakers are introducing new cars at a brisk pace, and car buyers are finally replacing the old vehicles they kept through the Great Recession.

"A lot of customers with their cars being 10 years old or older are looking to trade in and get something a little bit newer," he said.

GM, Ford, Chrysler, Toyota and Nissan all reported double-digit sales gains last month. Honda led the way with a 21 percent sales increase. Of major automakers, only Volkswagen had a down month. Its sales were off 3.3 percent as the top-selling Jetta compact faltered.

Industry sales rose 14 percent over last July to 1.3 million, according to Autodata Corp. On an annualized basis, the sales pace slowed slightly from June to 15.7 million. But that was still better than the annualized rate of 14 million from a year ago.

The industry's numbers for July come a day after the U.S. government reported stronger than expected growth for the April-June quarter. The consulting firm LMC Automotive said the improving economy could push this year's sales to around 16 million.